Private equity firm Sierra Madre is preparing to divest several of its mature investments and raise a new fund worth $150 million to $200 million, according to company chairman Martin Lorenzo.
Sierra Madre, founded in 2015, has reached the end of its five- to seven-year investment cycle and is now in the process of exiting about five portfolio companies, Lorenzo said in a chance interview on the sidelines of the Philippine Business Conference and Expo (PBC&E).
“We’re fully invested and are now divesting or merging and divesting,” said Lorenzo.
“We’ve already passed our investment period, so now we’re recouping the money and giving it back to our limited partners before raising the next fund,” he said.
The new fund will target larger ticket investments in the range of $25 million to $50 million, a significant increase from Sierra Madre’s initial investment range of $5 million to $15 million when it started in 2015.
“Businesses have gotten bigger, and there are more companies at that size now,” Lorenzo said.
“But we have to choose very well, our partners and our investing companies, because it’s not easy. We can look at as much as $30 to $50 [million] companies before making a single investment.”
The Makati-based firm is completing its second divestment after selling its school holdings. It also plans to exit its agriculture-related portfolio as part of its capital recycling strategy.
Sierra Madre said it remains keen on potential partnerships in healthcare, technology and education, although it will focus more on K-12 education rather than higher education, according to Lorenzo.
The private equity firm specializes in high-growth opportunities, carve-outs, leveraged buyouts and buy-and-build strategies across sectors such as retail, logistics, education, consumer goods, industrial services and healthcare.
Its past investments include Teco Servizi, Daniel O. Mercado Medical Center, and Mosaic, which operate in environmental services, healthcare and productivity software, respectively.
